Khorwal Financials
SWP — Systematic Withdrawal Plan
Generate the retirement income you deserve — without outliving your savings
The greatest fear of retirement isn't death — it's running out of money while still living. A Systematic Withdrawal Plan (SWP) is the intelligent solution to this problem: it converts your mutual fund corpus into a reliable, tax-efficient monthly income stream while allowing the remaining corpus to keep growing.
Most retirees in India default to Fixed Deposits — and slowly watch inflation erode their purchasing power over 20+ years. An SWP, structured correctly, keeps your corpus ahead of inflation and pays you every month.
At Khorwal Financials, we design SWP portfolios built for longevity — meaning your money should last as long as you do, and ideally leave something meaningful for your family.
Frequently Asked Questions
Q. What is a Systematic Withdrawal Plan (SWP)?
An SWP is a facility provided by mutual funds that allows you to withdraw a fixed amount of money at pre-defined intervals (usually monthly). It's essentially the opposite of a SIP, used to generate regular cash flow.
Q. Is SWP tax-efficient compared to dividends?
Yes, SWP is generally much more tax-efficient than dividends or FD interest. In an SWP, each withdrawal is considered a mix of principal and capital gains. Only the capital gains portion is taxed, and at a lower rate if held for over a year (LTCG).
Q. Can the principal amount decrease in an SWP?
Yes, if the withdrawal rate is higher than the fund's growth rate, the principal will decrease. Our goal at Khorwal Financials is to find a 'Sustainable Withdrawal Rate' that allows for income without depleting your corpus prematurely.
Q. Who should consider an SWP?
SWP is ideal for retirees seeking monthly income, professionals with a large corpus wanting to supplement their salary, or anyone needing regular payouts from their investments while keeping the rest invested for growth.
Ideal For
Retirees & near-retirees
Min. Corpus Needed
₹10L+
Withdrawal Frequency
Monthly / Quarterly
Tax Advantage
Lower vs. FD interest
A Real Retirement Scenario
Retirement Corpus
₹1 Crore
Monthly Withdrawal
₹40,000
Expected Fund Return
10–11% p.a.
Corpus Survives For
25+ years
* Based on balanced equity-debt portfolio with 10.5% average annual return. Past returns not guaranteed.
Why SWP Beats Every Alternative
Portfolio Survives, Income Continues
Unlike an annuity that ends with your death, an SWP-driven portfolio remains your asset. Unused funds continue to grow, beating inflation, and can be inherited by your family.
Tax-Efficient Monthly Income
FD interest is taxed at your slab rate (up to 30%). SWP withdrawals from equity funds held beyond 1 year attract only 10% LTCG tax on gains above ₹1L per year — a massive tax saving that compounds over retirement.
Inflation-Protected Withdrawals
We model your withdrawal amount against expected inflation, ensuring your ₹50,000/month today still covers your lifestyle at 70, not just at 60.
Fully Flexible & Reversible
Need more money one month? Pause, increase, or decrease your SWP at any time. No lock-ins, no penalties, no bank manager approvals.
SWP vs Fixed Deposit — The Numbers Don't Lie
| Feature | SWP (Mutual Fund) | Fixed Deposit |
|---|---|---|
| Monthly Income | ₹40,000 (from ₹1Cr corpus) | ₹33,000 (at 4% p.a.) |
| Tax on Income | 10% LTCG on gains only | As per income tax slab (up to 30%) |
| Capital Growth | Corpus continues to grow | Principal fixed; no growth |
| Flexibility | Fully flexible, pause anytime | Penalty on premature withdrawal |
| Inflation Protection | Yes — equity component grows | No — fixed interest rate |